Shares of Krispy Kreme soar more than 41 percent in week of gains
WINSTON-SALEM, N.C. -- Shares of Krispy Kreme Doughnuts Inc. rose more than 22 percent Friday, closing a week of strong gains for the troubled doughnut chain.
Shares closed the week at $7.50, up $1.38, or 22.55 percent in Friday trading on the New York Stock Exchange. For the week, shares were up 41 percent.
Last week, Krispy Kreme said it was cooperating with an investigation by federal prosecutors who want to interview current and former executives. The company said it believed the probe by the U.S. attorney for the Southern District of New York was related to matters already under formal investigation by the Securities and Exchange Commission.
Less than two years ago, Krispy Kreme shares traded near $50. On Feb. 24, the day the company announced the federal prosecutors' probe, the stock closed at an all-time low of $5.36.
Krispy Kreme is also under formal SEC investigation of its franchise buybacks and earnings outlooks and is facing shareholder lawsuits. The SEC investigation was announced in October.
In December, amid allegations in a stockholder lawsuit of padded sales figures, the company restated its 2004 earnings and warned investors it was in danger of defaulting on a $150 million credit line.
After posting losses in two of the last three quarters, the company's board ousted chief executive Scott Livengood in January. Krispy Kreme now is being run by turnaround specialist Stephen F. Cooper, who has announced the company will lay off 25 percent of its corporate employees and end a lease on a corporate jet.
Analysts have expressed concern that the company, once a Wall Street darling, may be headed for bankruptcy.
Krispy Kreme currently has 432 stores in 45 states, Australia, Canada, Mexico and the United Kingdom.
On the Net:
Krispy Kreme: http://www.krispykreme.com